A&W Restaurants, Inc. is an American fast food restaurant chain distinguished by its "Burger Family" combos, draft root beer and root beer floats. A&W's origins date back to 1919 when Roy W. Allen set up a roadside drink stand offering root beer at a parade honoring returning World War I veterans in Lodi, California. Allen's employee, Frank Wright, partnered with him in 1922 and they founded their first A&W restaurant in Sacramento, California, in 1923. The company name was taken from the initials of their last names – Allen and Wright. The company became famous in the United States for its "frosty mugs" – the mugs were kept in a freezer and filled with A&W Root Beer just before being served to customers.
Evolving into a franchise in 1926, the company today has over 900 locations in 16 countries, with 460 in the United States, Southeast Asian countries and Germany, serving a fast-food menu of hamburgers, hot dogs and french fries. A number of outlets serve as drive-in restaurants that have carhops. Previously owned by Yum! Brands, the chain was sold in December 2011 to a consortium of A&W franchisees through A Great American Brand, LLC. A&W restaurants in Canada have been part of a separate and unaffiliated chain since 1972.
History
Founding and early years On June 20, 1919, Roy W. Allen opened his first root beer stand in Lodi, California. The first day was for a homecoming celebration of soldiers who returned from battle in World War I.The American Drive-In Restaurant, by Michael Witzel, 1994, page 51. The following day, his stand was open for regular customers, selling root beer glasses for 5 cents ().A Great American Brand - 90 Years of A&W, by Christa Bourg, 2009, page 8. The following year, Allen opened a second stand in Stockton, California. Shortly afterward, the effect of the period of prohibition that existed in the United States from 1920 to 1933 gave Allen and his stand with a beverage with "beer" in the name a heavy rebound. Four years later, A&W began when Allen and Frank Wright opened their drive-in restaurant in Sacramento, California, combining both of their initials for the name, and selling the root beer from Allen's stand. Curbside service was provided by tray boys and tray girls. In 1924, Allen purchased Frank Wright's stake in the business. In 1925, Allen began franchising the root beer, while the franchisee added the other menu items and operated at their discretion. Most of the restaurants that opened under this scheme were on the highways of the Central Valley region, mainly for travelers. This may have arguably been the first successful food-franchising operation. Allen sold the company in 1950 and retired. A lot of World War I veterans eventually founded A&W franchises throughout the US, while some of their descendants still own franchises.
A&W's initial menu relied heavily on root beer and snacks, such as popcorn and peanuts, as well as sandwiches on sliced bread.
In 1927, J. Willard Marriott gained franchise rights for Washington, D.C., Baltimore and Richmond. Subsequently, he moved to Washington to open a root beer stand with Hugh Colton. These stands subsequently became Hot Shoppes, paving the way for the later creation of one of the largest hospitality corporations in the world. As of 1933, A&W had a total of 171 stands, increasing to 260 by 1941.A Great American Brand - 90 Years of A&W, by Christa Bourg, 2009, page 32.
A&W survived the Great Depression and labor shortages during World War II but benefitted from the post-war recovery of the American economy, with fast food and drive-in restaurants beginning to take shape. The first franchise convention was held in La Crosse, Wisconsin in 1949, but was limited to Wisconsin franchisees.A Great American Brand - 90 Years of A&W, by Christa Bourg, 2009, page 34.
Expansion
In the expansion years of the 1950s and 1960s, franchisees were signing 20- or 25-year contracts under the older model. The chain expanded into Canada in 1956, opening restaurants in Winnipeg and Montreal. By 1960, A&W had 2,000 restaurants. In November 1956, F. R. "Fran" Loetterle became the president of the chain.A Great American Brand - 90 Years of A&W, by Christa Bourg, 2009, page 44.
In 1963, the chain opened its first store on Okinawa, which at the time was under American control. In the following years, the chain branched into other foreign markets, including Guam (first territory outside of the North American continent to open a restaurant, in 1961),Milestones in the History of A & W Restaurants, Inc., by A & W Restaurants, Inc., January 1995. opened by Scotty Moylan, Mexico,A Great American Brand - 90 Years of A&W, by Christa Bourg, 2009, page 62. the Philippines (some sources say it opened in the 1990s) and Malaysia. The first restaurant in Malaysia (Malaya at the time) was opened on December 24 that year by Al and Geri Lieboff, a couple from Las Vegas, who got the franchising rights for Malaysia and Singapore. Setting up the chain seemed to be complicated, as they were unable to find a proper site, and in the recruitment process, Malayans had no consent to adorning Western "cabaret girl" style clothes. Already at the time of setup, kids were starting to favor chicken, burgers, and hot dogs rather than rice and curry, and within the next five years, would also see a rise in new locations up to 22 within five years.
The first restaurant in Europe opened in Mannheim (near Stuttgart), West Germany in 1962.A Great American Brand - 90 Years of A&W, by Christa Bourg, 2009, page 57. At the time, a city influenced by US military presence, the restaurant was showing signs of success for its novelty, the first drive-in restaurant in Germany, and had already made headlines in German newspapers. At the time, it was the 2283rd overall founded by the chain. There were already plans to introduce restaurants and drive-ins in other key European markets, such as the United Kingdom, according to the chain's president.
Dale Mulder opened up a Lansing, Michigan A&W franchise in 1961. In 1963, Mulder added the bacon cheeseburger to his menu after a customer made repeated orders for bacon to be added to his cheeseburger. Thus A&W is credited with inventing the bacon cheeseburger.
United Fruit Co. and United Brands Company subsidiary In 1963, the company was sold again, followed by another sale in 1967 to the United Fruit Co. conglomerate. AMK Corporation purchased United Fruit in 1970. Then AMK formed United Brands Company to hold A&W.
In 1971, A&W Beverages Inc.—a beverage subsidiary—began supplying bottled A&W products to grocery stores. The bottled products would become available nationally. In 1972, A&W's Canadian division was sold to Unilever.
A&W attempted to open restaurants in mainland Japan in the early 1970s, specifically in Fukuoka prefecture and the regions of Kanto and Kansai. The chain's performance on the mainland was sluggish in contrast to Okinawa due to several factors, such as the 1973 oil crisis, prompting the chain to withdraw from the market. A&W's Japanese operations are still handled from Okinawa. There were further fruitless attempts to bring the chain to the mainland: in the 1980s, the Okinawan branch briefly attempted to open restaurants in Kagoshima Prefecture but ended up limiting itself to Okinawa,米国の味「憧れ」大切に A&W、県内専念 25店根付く 日本経済新聞、2012年5月10日 while in the 2000s a pilot restaurant existed in Tokyo, which was quickly withdrawn.
1978 saw the introduction of a standard menu for use in all restaurants in the USA.History of A&W Restaurants, Inc. - The Taste America Loves to Remember, by A&W Restaurants, Inc., 1995.
In the 1970s, A&W had more stores than McDonald's, with a peak in 1974 of 2,400 units. Oshkosh, Wisconsin, franchise manager Jim Brajdic said: "Problems back then, including a lawsuit, franchisee discontent, and inconsistencies in the operation, caused the chain to flounder and branches to close." A&W moved to a modern-style franchise agreement that introduced royalty payments and new standards. However, many franchisees refused the revised terms as their 20- or 25-year original agreements expired. In 1980, the number of restaurants had fallen to 1,300 in the United States (mostly in the Midwest and the North West), Asia, and Europe. In 1980, the Singaporean franchisee Temenggong Ltd. had increased the number of restaurants in the country, while nine new restaurants were planned in Malaysia. There were also plans to open restaurants in the Philippines and Hong Kong. Negotiations to sell the chain began in November 1981.
Taubman Investment Co. subsidiary In 1982, A. Alfred Taubman purchased A&W and placed it under Taubman Investment Co. Taubman only purchased the restaurant company and not A&W Beverages. The chain dropped to fewer than 500 locations in the mid-1980s. A freeze on issuing franchises was put in place. Taubman wanted to restructure the chain by changing its "outdated" image. Franchisees were being neglected in the United Fruit phase. Taubman opted to withdraw agreements with 100 franchisees that were performing poorly and ousted 80% of its workforce. With this, the new management decided to split its fast-food restaurants into two units the conventional orange roof A&W restaurants, which were still the majority, and A&W Great Food Restaurants.
In 1983, A&W opened its first restaurant in Thailand, at the Central Ladprao shopping mall in Bangkok.
In 1985, A&W began offering the Third Pounder to compete with McDonald's Quarter Pounder. As advertised, the Third beat the Quarter in taste tests and was less expensive by weight. In his 2007 memoir, former owner A. Alfred Taubman claimed research had revealed that it had been unsuccessful in part due to Americans' widespread innumeracy, specifically their inability to understand fractions: 1/3 was perceived as smaller than 1/4 (due to the smaller denominator) despite being a larger quantity. The burger was relaunched in 2021 as the 3/9 Pound burger, humorously attempting to capitalize on the now-popular fractions misunderstanding story.
In 1985, the chain struggled in Singapore, losing its relevance to newer, larger chains and its dominance in the fried chicken area to KFC. The chain was about to amp up its operations in the Asian region, with a possible launch in Hong Kong as well as three new restaurants in Thailand.
On April 21, 1985, its first restaurant opened in Indonesia, in the Melawai area of South Jakarta, its capital.A Great American Brand - 90 Years of A&W, by Christa Bourg, 2009, page 142. Currently, Indonesia is the chain's largest international market, which as of February 2023 claimed 243 restaurants in 30 cities. A restaurant in Ximending, Taiwan opened on February 22, 1986. Its two units in Kuwait were closed in 1988 owing to security concerns.A Great American Brand - 90 Years of A&W, by Christa Bourg, 2009, page 146. It was in Kuwait, during a US-Malaysia trip, that Kevin Bazner was held hostage in August 1990 when the plane he was on board was set for refueling;Roberts, R. (1990, Aug 29). The hostage who made the right suggestion: [FINAL edition]. The Washington Post he was released in December.
Negotiations were held with Sonic Drive-In for a potential buying of the chain, but the plans fell in October 1986 due to a decline in franchises.Carter, K. (1986, Oct 01). SONIC DISCONTINUES TALKS TO BUY A&W RESTAURANTS / JOINT DECISION, SAYS STEWART. Journal Record Expansion plans were formulated in August 1987 with the opening of twenty new restaurants in a one-year period.Cooper, R. (1987). A&W restaurants expanding with locally designed outlets. Business First, 3(52), 6.